The right-wing Czech coalition government has agreed to slash public spending by 23.6 billion koruna (£800 million) this year, Prime Minister Petr Necas announced on Wednesday.
Mr Necas said the hefty budget cut would serve to reduce the government deficit from 3.7 to 3.5 per cent of GDP this year.
The PM survived a no-confidence vote in parliament on Tuesday but the opposition Social Democrats (CSSD) and Communist Party of Bohemia and Moravia have vowed to keep up the pressure.
CSSD leader Bohuslav Sobotka said: "We are convinced that it would be a big mistake if the government were allowed to continue with its intentions to privatise the pensions system, privatise teaching hospitals, increase the price of food, raise value added tax and continue with the restitution of church property."
Trade unions have called a mass demonstration against the cuts for April 21.